Hitachi : profit beats estimates on lower costs, high-speed trains in Britain
July 28, 2017 at 09:42 am
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TOKYO (Reuters) - Japanese industrial conglomerate Hitachi Ltd reported a stronger-than-expected quarterly profit on Friday, helped by lower costs as well as strong sales of high-speed trains in Britain and construction machinery in China.
The electronics-to-elevators maker said its April-June operating profit jumped 44 percent from a year earlier to 131.8 billion yen ($1.19 billion). The market expected an operating profit of around 96 billion yen, based on the average of seven analysts' estimates compiled by Thomson Reuters I/B/E/S.
Hitachi has driven down costs and shifted away from unprofitable businesses in recent years. Its 6.3 percent operating margin, up from 4.3 percent a year earlier, was a record high.
Chief Financial Officer Mitsuaki Nishiyama told reporters that the company would maintain its sales and profit outlook for the full year, however, citing uncertainty over China's economy in the second half of the year.
(Reporting by Kentaro Hamada; Editing by Christopher Cushing)
Hitachi specializes in manufacturing and marketing of electronic and industrial equipments. Net sales (including intragroup) break down by family of products and services as follows:
- social infrastructure and industrial systems (24.7%): elevators, escalators, industrial facilities, railway systems, power generation units, etc. The group also provides engineering and construction of nuclear, hydroelectric, and thermal power plants services;
- information and telecommunications products and services (20.1%): systems integration, cloud computing, software, servers, hard disks, PCs, ATMs, data communication base stations, payment terminals, etc.;
- materials and components (16.6%): semi-conductor materials, printed circuit cards, cables, copper and forged steel products, magnetic materials, organic and inorganic chemical products, etc.;
- construction equipment (10%) : hydraulic excavators, wheel loaders, mining equipment, etc.;
- automotive systems (9.4%): powertrain systems, control systems, etc.;
- electronic products (9.2%): fiber-optic components, screen tubes, testing and measurement equipment, medical equipment, equipment for manufacturing semiconductors, etc.;
- household appliances (4.7%): heating and air conditioning equipments, refrigerators, washing machines, etc.;
- other (5.3%): mainly transport, financial and logistical services.
Net sales are distributed geographically as follows: Japan (49.2%), Asia (21.3%), North America (12.7%), Europe (10.8%) and other (6%).